Interest Only mortgage ending in2Yrs. Renewal requ

goodraw

Hi,
I have a 5 year interest only mortgage with nationwide which will be expiring in under 2 years. I wish to renew or remortgage for another 5-7 years.( Iknow that interest only mortgages are being discouraged and being withdrawn).
I am 62 years old and my income has gone down since I took it out;its unlikely I would get a mortgage from another lender, therefore would be happy if they re-mortgaged without asking for income proof. The mortgage amount is £124,000. My property is valued at around £370000.I have aprox. £160,000 in investments/savings.
My questions are, would nationwide offer to extend it after when it comes to an end, and is there any chance I could re-mortgage with another lender?

enthusiasticsaver

You are right that the majority of lenders now frown on interest only mortgages and if your income will not sustain a £124000 mortgage you may run into difficulties. Many lenders also will not lend past the age of 70 so you may have to restrict the period to 6 years and reduce the mortgage by using your savings/investments to fulfil their affordability criteria.


What is the plan? To eventually downsize?

goodraw

I'm getting more interest on my investments than the rate on the mortgage, and I'm in a position to afford the repayments (£300.00 PM).

Would nationwide offer to renew it automatically as an interest only mortgage, at whatever rate they're offering at the time?
What is the standard procedure under such circumstances?

TrickyDicky101

If the actual mortgage term is coming to an end (rather than just a product expiry date eg say if you agreed a fixed rate for 2 years but your entire mortgage term was 20 years) then I think NW will necessarily need you to pass affordability to be offered a further mortgage (of any type).

Essentially you want NW to fund your investments.

Have you spoken to any brokers over this - they are the most likely people to know if such option(s) are available to you.

Thrugelmir

goodraw wrote: »

I'm getting more interest on my investments than the rate on the mortgage, and I'm in a position to afford the repayments (£300.00 PM).

How secure is the income generated and the capital invested. Another interest only mortgage just kicks your problem down the road. As interest rates rise, then your outgoings will increase. Likewise as interest rates rise, the value of your investments potentially may fall.

We've all enjoyed a decade of free returns and profitable. All the signals are is that era is finally drawing to a close. When to cash in is the decision only you can make.

goodraw

Its the fixed rate coming to an end,actual mortgage expires in 2025.I was previously on a fixed rate, when that finished, they offered me the one I'm on without any questions.
The LTV is about 34%. I have proof of the £160k investments. Never missed a payment.I would have thought they'd want more customers like me not less.

AnotherJoe

goodraw wrote: »

Its the fixed rate coming to an end,actual mortgage expires in 2025.I was previously on a fixed rate, when that finished, they offered me the one I'm on without any questions.
The LTV is about 34%. I have proof of the £160k investments. Never missed a payment.I would have thought they'd want more customers like me not less.

Then you need to apply for a retention product because there won't be a income check, same as last time. So look to see what they will offer you online, same as last time.
Your investments are irrelevant, as someone else said they aren't in business to subsidise people gambling / investing on the stock market.

goodraw

So do I ask them for a "retention product" ? BTW I'm not gambling on the stock market with my savings; Proving you have assets with which you could pay off the borrowed money is a big plus...

Thrugelmir

goodraw wrote: »

So do I ask them for a "retention product" ? BTW I'm not gambling on the stock market with my savings; Proving you have assets with which you could pay off the borrowed money is a big plus...

They have no control over what you do with your assets.

I was previously on a fixed rate, when that finished, they offered me the one I'm on without any questions.

The world has progressively changed since 2008. Regulation has become tighter.

I would have thought they'd want more customers like me not less.

Lenders generally operate at the macro level not the micro. Plenty of business in the market without trying to underwrite on a case by case basis. Those lenders that do will recoup the cost.

AnotherJoe

goodraw wrote: »

So do I ask them for a "retention product" ? BTW I'm not gambling on the stock market with my savings; Proving you have assets with which you could pay off the borrowed money is a big plus...

Yes, Ask them what deals are available to existing customers to move onto. Thats wha a retention product is. If you do it online there are generally no further checks, which is what happened last time, correct? That may also be the case by phone or by calling into a branch but the lower the interaction you have with them the better the odds they wont ask you any questions you'd prefer they didnt, such as " what are your earnings now"

goodraw wrote: »

BTW I'm not gambling on the stock market with my savings; Proving you have assets with which you could pay off the borrowed money is a big plus...

You did mention "investments" If those assets are in terms of shares, bonds, funds, yes you are.

Suppose a month ago you proudly showed them how you could pay off your mortgage at any time as you had £160k in dividend paying Carillion shares to fall back on?

goodraw

Suppose a month ago you proudly showed them how you could pay off your mortgage at any time as you had £160k in dividend paying Carillion shares to fall back on?

There are investments out there which guarantee you will get back your original investment. Not everything will turn out to be carrillion.
It's a matter of how much risk one is prepared to take- but you're taking a risk by walking out the front door everyday because you could avoid getting hit by a bus if you didn't.